Valeria Bednarik, chief analyst at FXStreet explained that the EUR/JPY pair has been consolidating around the 126.00 level for most of the past week, rallying up to 126.45 on Friday, to close the week barely positive.
Key Quotes:
“Despite the latest news coming from Japan, showing inflation is still too low, and the subsequent speculation of further BOJ’s easing, the Japanese Yen refuses to fall. The dollar has been the king this past week, getting a boost from US policy makers, who suggested the Central Bank will remain in the tightening path and is ready to raise rates as required, even next April, helping in keep the EUR/JPY range bound.”
“Technically, the daily chart shows that the pair remains well below its moving average, with the 100 DMA currently around 128.63, which means that a break above it required to consider a more constructive long term tone. In the same chart, the technical indicators hold within positive territory, but lack directional strength.
In the 4 hours chart, the pair is currently above its 100 and 200 SMAs, both around 125.60, although the technical indicators present a neutral stance, which means further technical confirmations are required before the pair can rally up to 127.30, this March high.”
(Market News Provided by FXstreet)